Based on book of Ferrell MCBApordo 1

Common terms used in relation to

SOCIAL RESPONSIBILITY
oBUSINESS ETHICS
oCORPORATE VOLUNTEERISM
oCORPORATE CITIZENSHIP
oREPUTATION MANAGEMENT
oPUBLIC RELATION
Based on book of Ferrell MCBApordo 2
HUNTSMAN CASE
o“The general population believes
that US Corporations owe something
to their workers and the
communities in which they operate,
and should sometimes sacrifice some
profit to make things better for their
workers and communities.”
Based on book of Ferrell MCBApordo 3
Private Companies as
ARTIFICIAL
BEING

Based on book of Ferrell MCBApordo 4

Consequences of failure to these
SOCIAL
RESPONSIBILITIES
oINFORMAL
oFORMAL

Based on book of Ferrell MCBApordo 5

“WHY SHOULD THESE PRIVATE COMPANIES
SHELL OUT ITS HARD EARNED MONEYS TO
THE WORKERS OR COMMUNITIES?”
o Business today are expected to look
beyond self-interest and recognize that
they belong to a larger group, or society,
that expects responsible participation.
o Society grants them both benefits and
responsibilities.
Based on book of Ferrell MCBApordo 6
CHARACTERIZATIONS
License to Operate •A condition for doing business

Long-term Business •To improve business environment for future

Investment progress

Vehicle for achieving •Stronger customer loyalty, more committed

employees, better government relations and
goals and reputation good reputation

Activity to avoid •Avoid being singled out or exposed to

exposure and risk unnecessary outsider intrusion
Based on book of Ferrell MCBApordo 7
CHARACTERIZATIONS
Economic and •Reinforce economic foundation and viability of
Constructive the community in which they operate

•Business and society are interwoven and

Relationship interdependent

Responsibility to •Legitimate interest of Stakeholders

Stakeholders

•Companies are designed (only) to increase

Oxymoron Shareholders/Stockholders wealth
Based on book of Ferrell MCBApordo 8
DEFINITION
of Social Responsibility
o The adoption by a
business of a strategic
APPLIES TO ALL
focus for fulfilling the
economic, legal, ethical,
STRATEGIC FOCUS
and philanthropic SOCIETY’S EXPECTATION
responsibilities expected
of it by its stakeholders. STAKEHOLDER ORIENTATION
Based on book of Ferrell MCBApordo 9
SR APPLIES TO ALL
types of Business
o Although the SR efforts SOLE PROPRIETORSHIP
of LARGE companies
usually receive the most PARTNERSHIP
attention, the activities
of SMALL companies CORPORATION
may have a greater
impact on local RunTex Case
communities. Based on book of Ferrell MCBApordo 10
SR ADOPTS A
Strategic Focus
o Involves action and measurement
for implementation (ex. Core SOLE PROPRIETORSHIP
Value – Herman Miller Case vis-à-
vis Core Value of SLSU) PARTNERSHIP
o Requires both words and action
o SR must be given the same CORPORATION
planning, time, priority, and
management attention that is
given to other company initiative

Based on book of Ferrell MCBApordo 11

SR FULFILL
Society’s Expectations
PHILANTHROPIC
RESPONSIBILITIES
ETHICAL
RESPONSIBILITIES
LEGAL RESPONSIBILITIES

ECONOMIC RESPONSIBILITIES
Based on book of Ferrell MCBApordo 12
ECONOMIC
Responsibilities
o Responsibility to be economically viable.
 Return on Investment
 Create jobs
 Contribute to the
national economy

Based on book of Ferrell MCBApordo 13

LEGAL
Responsibilities
o Obey laws and regulations issued by the
government agencies.
 What agencies enact law?
 Hierarchy of laws

Based on book of Ferrell MCBApordo 14

HIERARCHY CONSTITUTION

OF LAW

LAWS IMPLEMENTING RULES

& REGULATIONS

ORDINANCE

CONTRACTS
Based on book of Ferrell MCBApordo 15
LEGAL
Responsibilities
o Obey laws and regulations issued by the
government agencies.
 Case of Microsoft vis-à-
vis SM and
TRANSCO(NGCP)
Based on book of Ferrell MCBApordo 16
ETHICAL
Responsibilities
o Principles and standards that guide
behavior of an organization.
 Code of Conduct within Organization
 Laws and IRR
 Case Study of DSA
Based on book of Ferrell MCBApordo 17
PHILANTHROPIC
Responsibilities
o Promote human welfare and goodwill of
company.
o ETHICS vs. PHILANTHROPIC
 Codified and not
 Mandatory and optional
Based on book of Ferrell MCBApordo 18
PYRAMID OF
Responsibilities
o Viewed now as holistic fashion, with all
four responsibilities seen as related and
integrated.
 Minimal – Cost of Doing Business
 Strategic – part of is mission,
vision and practices
Based on book of Ferrell 19
EXPECTATION
“…pursuit of social
responsibility is never
ending.”
Based on book of Ferrell MCBApordo 20
SR REQUIRES A
Stakeholder Orientation
o Stakeholder vs.
Stockholder/Shareholder OWNERS
o Definition – constituents that
have a stake in, or claim on, CREDITORS
some aspect of company’s
products, operations, markets, CONSUMERS
industry, and outcomes.
REG/NAT COMMUNITY
LOCAL COMMUNITY
Based on book of Ferrell MCBApordo 21
DEVELOPMENT OF
Social Responsibility
SEVEN LESSON OF THE FINANCIAL CRISIS
o Transparency o Absence of
o A long term rating trigger
perspective o Minimal Counter
o Liquidity Party exposure
o Limited use of o Diversification
derivatives Based on book of Ferrell MCBApordo 22
GLOBAL NATURE
Of Social Responsibility

Based on book of Ferrell MCBApordo 23

BENEFITS OF
Social Responsibility
TRUST INVESTOR LOYALTY

CUSTOMER PROFIT
SATISFACTION
NATIONAL
EMPLOYEE
COMMITMENT
ECONOMY
Based on book of Ferrell MCBApordo 24
FRAMEWORK
Social Responsibility
STRATEGIC MANAGEMENT OF EMPLOYEE RELATIONS
STAKEHOLDER REL.
CONSUMER RELATIONS
CORPORATE GOVERNANCE TECHNOLOGICAL ISSUES
LEGAL, REGULATORY AND SUSTAINABILITY ISSUES
POLITICAL ISSUES
GLOBAL SOCIAL RESPON.
BUSINESS ETHICS
Based on book of Ferrell
SOCIAL AUDIT
MCBApordo 25
 END OF
CHAPTER 1
Based on book of Ferrell 26